Tuesday, June 19, 2012

Bankers and Farmers

“The Invisible
Hand Will Do Its Magic”

Jim Rogers is an author, financial commentator and
successful international investor. He has been frequently featured in Time, The
New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC

"We don't need more bankers. What
we need are more farmers. The invisible hand will do its magic." - in CBS Market Watch”

Comment

If
“The invisible hand” exists – a Big “if” – then it already has done what
it can with its “magic”. As it
hasn’t achieved much to produce more farmers, we can expect more bankers than
farmers, unless more banks fail and some ex-bankers run off to live on farms,
possibly re-possessed when they were bankers. The statement is empty of
predictive value, irrespective of Jim’s preferences for farmers, which, of
course, is the kind of empty rhetoric heard from people chatting at smart
people’s dinner parties.

However, the statement also reveals that Jim
knows little about the empty content of the myth of the invisible hand that was
invented at 1940s dinner parties while chatting about the awesome Soviet
propaganda against markets at the start of the Cold War. No doubt some smart international
investor declaimed his brilliance with what he considered to be a knowing
remark about invisible hands that he had picked up in a boring lecture years
ago at College.

From a reputation for brilliance, investors
made fortunes, certainly more than they could ever earn from farming. In time we ended up with more bankers,
financial analysts, investment advisors, and witty-sounding, dinner party
guests. We also ended up with
fewer farmers.